Funding Our Future: An Adequacy Model for Wisconsin School Finance.

107 Pages·2012·1.84 MB·English

DOCUMENT RESUME
ED 471 308
EA 032 076
Norman, Jack
AUTHOR
Funding Our Future: An Adequacy Model for Wisconsin School
TITLE
Finance.
Institute for Wisconsin's Future, Milwaukee.
INSTITUTION
2002-06-00
PUB DATE
NOTE
105p.
AVAILABLE
Institute for Wisconsin's Future, 1717 South 12th Street Suite
203, Milwaukee, WI 53204. Tel: [phone]; Fax: [phone];
FROM
e-mail: [email protected]. Web site:
http://www.wisconsinsfuture.org/. For full text:
http://www.wisconsinsfuture.org/reports/Adequacy_report6_02.pdf.
Evaluative (142)
PUB TYPE Reports
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*Educational Equity (Finance); *Educational Finance; Educational
DESCRIPTORS
Legislation; Elementary Secondary Education; *Equal Education;
Expenditure per Student; *Finance Reform; Financial Needs;
Fiscal Neutrality; *Models; State Aid
IDENTIFIERS
*Wisconsin
ABSTRACT
This report not only proposes a method to determine how much
money is required to give Wisconsin's children an equal opportunity at
educational proficiency, it also explores ways the money should be
distributed. The first two chapters summarize the current situation regarding
school finance and the history of the current fiscal crisis, paying special
attention to the notion of school finance "adequacy" and outlining its
emergence in the 1990s as the dominant theme in school-finance litigation
nationwide. Chapter 3 explains the process used to determine what resources
are needed to satisfy the educational standards issued in 1998 by the
Wisconsin Department of Public Instruction and describes the use of a
professional-judgment model to determine necessary resources. Chapter 4 lays
out in detail the resources needed to reach educational adequacy, including
core resources, resources for special cases, and resources that go beyond
traditional public schools. Chapter 5 explores the costs of these resources
and explains the methodology used to determine costs, as well as the concept
of a foundation system for distributing funds. The last chapter discusses the
feasibility of implementing adequacy in Wisconsin and details ways of
reducing the initial costs of adequacy. Six appendices provide information on
educational standards, comparative data, and other items of interest.
(RJM)
Reproductions supplied by EDRS are the best that can be made
from the original document.
Funding Our Future
An Adequacy Model for Wisconsin School Finance
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U.S. DEPARTMENT OF EDUCATION
Office of Educational Research and Improvement
EDUCATIONAL RESOURCES INFORMATION
Jack Norman, Ph.D.
CENTER (ERIC)
This document has been reproduced
as
received from the person or organization
originating it.
Minor changes have been made to
improve reproduction quality.
INSTITUTE FOR WISCONSIN'S FUTURE
Points of view or opinions stated in this
policy research in the public interest
document do not necessarily represent
PERMISSION TO REPRODUCE AND
official OERI position or policy.
DISSEMINATE THIS MATERIAL HAS
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ilde04-141
June 2002
TO THE EDUCATIONAL RESOURCES
INFORMATION CENTER (ERIC)
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Funding Our Future
An Adequacy Model for Wisconsin School Finance
Jack Norman, Ph.D.
June 2002
Acknowledgements
Significant analytic contributions to this document were made by Richard Rothstein and Thomas Moore.
IWF is grateful to the scholars, educators, parents and school administrators who participated in the
expert panels, responded to the survey, assisted in the initial focus group discussions and created the
sense of urgency for this task by their active commitment to improving the financial structure of Wisconsin's
K -12 public schools.
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WISCONSIN'S FUTURE
policy research in the public interest
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FUNDING OUR FUTURE:
An Adequacy Model for Wisconsin Public School Finance
TABLE OF CONTENTS
PREFACE
INTRODUCTION
iii
EXECUTIVE SUMMARY
vii
CHAPTER ONE: WHERE WE ARE AND HOW WE GOT HERE
1
CHAPTER TWO: AN ADEQUACY SYSTEM OF SCHOOL FINANCE
9
CHAPTER THREE: THE PROCESS FOR DETERMINING ADEQUATE RESOURCES
15
CHAPTER FOUR: ADEQUATE RESOURCES TO MEET WISCONSIN STANDARDS
19
35
CHAPTER FIVE: COSTING OUT RESOURCE STANDARDS
57
CHAPTER SIX: IS ADEQUACY FEASIBLE?
65
CONCLUSION
APPENDICES
Appendix One: Synopsis of Wisconsin Model Academic Standards
67
Appendix Two: Academic Proficiency of Wisconsin Students
72
Appendix Three: Defining a Thorough Education Infrastructure
74
87
Appendix Four: Adequacy Model Development Participants
90
Appendix Five: Adequacy Models for Elementary, Middle, and High Schools
93
Appendix Six: School Finance and Adequacy Resource Information on the Internet
95
BIBLIOGRAPHY
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FUNDING OUR FUTURE: An Adequacy Model for Wisconsin Public School Finance
"Unquestionably, the cost to fix the system is high. The cost of not
fixing it will be much higher. Uneducated citizens will extract
extremely high social costs in the future. As the mechanic
on television
says, 'You can pay me now or pay me later'
Wisconsin Supreme Court Justice William A. Bablitch (Vincent v. Voight, 2000)
PREFACE
Even in the difficult current fiscal situation
with recession and the post-September 11 environment'
forcing painful choices for Wisconsin state government
it is critical to hold to a long-term vision for
real investment in the state's public school system. Even if in the short run not a single additional
penny
goes into Wisconsin schools, there must be in place a plan for the future, a school-finance system
containing a long-term commitment to adequate funding for education. Both war and recession
are
temporary, and the economy moves in cycles. But the state's commitment to quality education for all
children must be neither temporary nor cyclical. Our vision for tomorrow must not be obscured by
today's financial problems.
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FUNDING OUR FUTURE: An Adequacy Model for Wisconsin Public School Finance
INTRODUCTION
Wisconsin needs a new way to fund public schools.
Just one year ago, this was a minority point of view. Now, after an extended period of deepening
fiscal crisis in public education, it is an idea much more widely embraced, especially by the state's
political establishment.
This report outlines an entirely new way of looking at how to finance the state's more than 2,000 public
elementary, middle, and high schools, with their nearly 900,000 students. It is what school-finance
professionals call an Adequacy Model.
Most current discussion on school finance reform is motivated by politics, by taxes, and by the deterio-
rated condition of the state's balance sheet. Lost in the discussion are genuine educational needs. The
Adequacy Model, by contrast, is guided by educational needs, rather than by taxes, politics, or the
cyclical health of the state budget. It takes as a starting point something that should be common sense:
that a system for funding public schools be based on educational goals and methods.
The core of this Adequacy analysis is found in a table at the end of Chapter Five, which details estimates of
adequate funding for each of the 426 school districts in Wisconsin. The real meaning of this report,
however, is found not in those numbers, but rather in the method used to determine them. More
precisely, it is the very questions posed at the beginning of the exercise
not the final numerical
result
that contain the real meaning of "Adequacy" for Wisconsin: What are the goals of educa-
tion? What resources do schools need so that all students have a chance of achieving those educa-
tional goals? What staffing, what materials, what curricula, and what management structures are
required to fulfill the state constitutional requirement that all students have an equal opportunity for a
successful education? What level of funding is required to provide these resources?
If the cost of achieving educational standards is too expensive, then either the standards must be
lowered or a long-term plan adopted for gradually obtaining the needed funds. What should not
happen is continuing to rhetorically support artificially high standards, while providing inadequate
funding with no road map for reaching adequate funding in the future.
The current school finance system dates to the early 1990s, when a Republican governor joined with
Republican and Democratic legislative leaders to pass its three main elements, designed to restrict the
growth of property taxes. Even though education is the largest user of state and local taxes, the system
implemented then was little more than a series of political compromises. It was not a strategic approach
the state's
to education and the long-term economic health of Wisconsin. The crowning piece of legislation
so-called two-thirds funding commitment was written behind closed doors, without any public
hearing or review. That short-term political solution has lasted nearly a decade, and is now bursting
with the pressure of years of simmering problems.
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FUNDING OUR FUTURE: An Adequacy Model for Wisconsin Public School Finance
The current system sets school spending without regard to educational needs. That's because the
revenue-limit system means next year's spending is based mostly on this year's, this year's on last
year's, last year's on the year before that, all emerging from a convoluted thicket of formulas with 1993
as an arbitrary starting point.
An Adequacy Model of school finance is designed from the ground up to create real links among
spending, educational goals, and the resources needed to attain those goals. An Adequacy Model bases
funding on the expenses for facilities, staffing, materials, equipment, and strategies necessary to meet
specific academic goals. By contrast, the current system, and most proposed reforms, base funding on
available revenue, geographic accidents of property wealth, and mere historical precedent.
An Adequacy Model of funding does not override local control. This report uses a concrete set of
resources as the basis for calculating costs. But it does not propose that schools be mandated to buy
exactly those resources. Rather, local districts would receive state funds in the form of block grants,
and would be free to use the funding as they see fit.
An Adequacy Model has built-in accountability, because it links funding to student performance. There
is no statistically significant correlation between current per-pupil spending and student achieve-
ment, as measured on the state's standardized tests. There is, however, a statistically significant
correlation between spending and achievement, when actual spending is adjusted by the Adequacy
concepts developed here.
There is no doubt that improvement in performance is needed. Even though Wisconsin students have
among the nation's better scores on the National Assessment of Education Progress tests
the nation's
premier achievement scorecard
still less than one in three score as proficient or above. There are
sizable achievement gaps for students from low-income families and students of color. [NAEP, 2002]
This is not the first time that an Adequacy Model has been proposed for Wisconsin. Allan Odden, a
nationally distinguished school finance scholar at the University of Wisconsin-Madison, already made
such a proposal more than a year ago. In October 2000, Odden made a presentation on "An Adequacy
Approach to Wisconsin School Finance" to the Governor's Blue-Ribbon Commission on State-Local
Partnerships for the 21st Century (commonly known as the Kettl Commission). Odden, a member of
that commission, urged the group to recommend the state "adopt a school finance system that provides an
adequate amount of money per pupil," one that would "teach students to high performance standards"
and that "holds schools, teachers and students accountable for performance." [Odden, 2000]
The Kettl Commission failed to follow Odden's advice. This report, while differing in many of its details
from Odden's approach, nevertheless follows in the spirit of his recommendation. Especially relevant is
Odden's hope of converting Wisconsin's finance system from one hopelessly tangled in fiscal
formulas to one intimately grounded in educational goals and practices. As Odden expressed it to the
Kettl Commission, he sought to "reposition school finance from [the] technical arena of formulas to [the]
supportive center of the education system." [Odden, 2000]
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FUNDING OUR FUTURE:
An Adequacy Model for Wisconsin Public School Finance
This report proposes a method to determine how much money it will take to give all Wisconsin
children an equal opportunity at educational proficiency, and how that money should be distributed. It
does not take up in detail the question of how the money should be raised.
Chapter One summarizes the current situation regarding school finance in Wisconsin, and the history of
how we reached the current fiscal crisis. It explains in more detail how structural problems in the
system stand in the way of educational success.
Chapter Two elaborates on the notion of school finance Adequacy, and chronicles its emergence in the
1990s as the dominant theme in school finance litigation nationwide. It explores the recent history of
school-finance litigation and educational standards in Wisconsin.
Chapter Three explains the process used to determine what resources are needed to satisfy the educational
standards issued in 1998 by the Wisconsin Department of Public Instruction. It explores the use of what
school finance professionals call a professional judgment model to determine necessary resources.
Chapter Four lays out in detail the resources needed to reach educational Adequacy. Those include
core resources, needed in all schools; resources for special cases; and resources that go beyond
traditional public school institutions. Finally, the chapter suggests staffing requirements for model
elementary, middle and high schools.
Chapter Five explores the cost of those resources. It explains the methodology used to determine costs
and the concept of a foundation system for distributing funds. It specifies concrete dollar figures for an
Adequacy system, and calculates the Adequacy funding levels for every school district in the state.
Chapter Six discusses the feasibility of implementing Adequacy in Wisconsin. It details ways of initially
reducing the cost of Adequacy, how Adequacy contributes to accountability, why Adequacy does not
infringe on local control, and how Adequacy might be funded.
There are six appendices:
Appendix One summarizes the state Department of Public Instruction's educational standards.
Appendix Two presents state and national data on what proportion of Wisconsin students are
academically proficient.
Appendix Three contains results the Institute for Wisconsin's Future (IWF) survey of principals and teachers.
Appendix Four lists participants in IWF's Adequacy panels.
Appendix Five summarizes panelists' final resource recommendations.
Appendix Six lists Internet web links for further reading on Adequacy models of school finance.
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Public School Finance
EXECUTIVE SUMMARY
The need to reform Wisconsin's school funding system has emerged as a major issue for 2002
an
issue pushed by parents and educators, researched by policy groups, and discussed by interest
groups across the state.
In 1998, the Institute for Wisconsin's Future
a non-profit policy research, education, and advocacy
organization
launched an effort to develop an alternative funding structure for Wisconsin. The goal
was a system based not on tax and budget politics but on the learning needs of Wisconsin's nearly
900,000 public school students. The Adequacy model resulting from this work links funding to educa-
tional goals and the resources required to meet those goals. An Adequacy model provides districts the
funds they need to buy the resources required to meet ambitious student-achievement goals.
Wisconsin's current school system has evolved from thousands of tiny districts paid for and managed
by relatively similar rural communities, to a condensed network of 426 districts with diverse populations,
economies, and disparities in wealth and income. Over fifty years ago, a state aid program was created
to help offset differences in property wealth that shaped school revenue streams. This aid, however, did
not significantly lessen the major inequities in the local capacity to fund schools.
The increasing cost of schools over the past 15 years resulted in pressure for local property tax relief.
The state legislature responded to this pressure by establishing a new system in the 1990s based on
three components:
Limits on annual growth in district revenues and spending, based on budgets from the 1992-'93
school year;
Restrictions on teacher bargaining rights, resulting in a dampening of wage increases;
An initial boost in state aid, to hold down local property taxes and give additional resources to
districts with limited property wealth.
This nearly decade-old school finance system is in crisis. Educational costs have risen far faster than
the permissible budget increases under the spending limits. Revenue is proportional to enrollment,
which is dropping in over half of the state's districts. State and federal reimbursements for mandated
programs to serve students with special needs are a dwindling fraction of actual expenses.
The accumulation of these financial constraints has led to staffing and program cutbacks. The restraint
in teacher salary increases has caused wage levels to fall below regional and national averages, wors-
ening the shortage of skilled, experienced personnel.
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FUNDING OUR FUTURE: An Adequacy Model fin-Wisconsin Public School Finance
The current system is deficient not only in content but in form. The three-tiered aid structure is so convoluted
that adjustments are almost impossible without causing unintended and problematic financial side effects.
In the current structure, there is no relationship between funding levels and educational goals for children.
Wisconsin's funding issues mirror similar crises across the United States. Several decades ago, court
challenges to unequal spending and tax levels originally sought "equity" in school finance systems.
When that legal strategy failed to achieve its initial promise, however, a new approach to finance reform
developed which demanded not equity but an "adequate" education for all children. At the same time,
the national movement for educational standards generated criteria for defining what educational
outcomes give meaning to the concept of educational Adequacy.
In Wisconsin, three equity challenges to the school finance system were brought unsuccessfully to the
state Supreme Court in the past quarter-century. However, the Court's 2000 decision in the third case
cited the growing Adequacy movement. For the first time, the Court asserted a sufficiency condition on
state support for public education: "So long as the legislature is providing sufficient resources so that
school districts offer students the equal opportunity for a sound basic education as required by the
constitution, the state school finance system will pass constitutional muster." [Vincent v. Voight, 2000]
The state's Department of Public Instruction, the Legislature, the state Supreme Court, and individual
school districts have all developed versions of educational standards. Under an Adequacy model,
standards like these are the basis for developing a funding system. If students are to meet the stan-
dards, it is critical to determine the staffing, programs, equipment, and strategies necessary for schools
to be effective. The resulting "basket of goods and services" must be priced to determine the level of
funding needed to ensure that these resources are available to all schools.
The methodology for this Adequacy model was originally developed for use in Wyoming by recognized
school finance scholars James Guthrie, of Vanderbilt University, and Richard Rothstein, of the Eco-
nomic Policy Institute. Using the educational standards developed by the Wisconsin Department of
Public Instruction, a panel of educational experts designed model schools and delineated the staffing,
programs, and materials needed to operate these schools. A survey based on the resource standards
outlined by the experts was sent to principals and teachers statewide. Survey results, along with
information from a national research review, were brought to a second expert panel, which synthesized
the findings and defined key staffing, programming, and material needs for adequate schools.
The resource standards established through this method are:
Small schools: Elementary schools with a maximum of 350 students, middle schools with a maxi-
mum of 500, and high schools with a maximum of 800.
Small classes: A maximum of 20 students in kindergarten through third grade (15 in high-poverty
schools), 22 students in fourth and fifth grades, and 25 in sixth through twelfth grades.
Broad curriculum: Art, music, foreign language at all grade levels, and advanced courses, including
Advanced Placement, at all high schools.
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